Wipro takes over IT operations of German firm in $700-million deal

As part of the deal, Wipro will get 1,300 workers from Metro AG

Wipro Limited, a Bengaluru-based information technology, consulting, and business process services company, on Tuesday announced a strategic digital and IT partnership deal with German wholesaler METRO AG. The deal value is estimated at $1 billion (about Rs 7,384 crore).

As a part of this transaction, Wipro will take over the IT units of METRO AG — METRO-NOM GMBH in Germany and METRO Systems Romania SRL. Through this partnership, more than 1,300 employees across Germany, Romania and India will be moved to Wipro, providing them with new opportunities to advance their careers, access innovation, work with leading digital technologies and adopt new ways of working that enable agility, speed and scale in engineering.

The estimated deal value for the duration of the first 5 years is approximately $700 million. With the intention to extend up to 4 additional years, it can be a potential spend of up to $1 billion, the company said in a statement.

Wipro will deliver a complete technology, engineering and solutions transformation programme for METRO as it positions itself as a wholesale 360-degree provider in the hotel, restaurant and catering food industry fuelled by quality, focus and flexibility. Wipro’s transformation programme will encompass cloud, data centre services, workplace and network services, along with application development and operations to provide an integrated, flexible and robust digital infrastructure to help drive METRO’s transformation agenda.

“We are at a stage where we want to focus on the activities that are going to give us the strongest possible competitive advantage and to do that, we need to be confident in the digital infrastructure that underpins our growth. Partnering with Wipro allows us to simplify and streamline our IT landscape, and critically gives us access to innovation and the best digital practices,” commented Timo Salzsieder, CIO, METRO AG.

At the heart of the partnership is the formation of a joint Transformation Office and Innovation Council that will guide the businesses through the transformation and ensure collaborative innovation throughout the partnership, the statement said.

Thierry Delaporte, Chief Executive Officer and Managing Director, Wipro Limited said, “Like us, METRO AG is focused on leveraging digital transformation for competitive advantage. Wipro’s role is to make that transformation efficient and effective. Equally important for us is welcoming 1,300 new colleagues to Wipro and ensuring this move is positive and empowering for each of them."

As previously announced, Wipro also plans to launch a Digital Innovation Hub in Düsseldorf, Germany to support METRO and other clients in the region. The proposed Digital Innovation Hub will serve as Wipro’s flagship centre in Europe and enable organisations to cross skill and upskill, besides supporting talent development in local communities.

The take over is subject to customary closing conditions and regulatory approvals and is expected to close on or before April 30, 2021. The transaction was assisted by the global strategy consulting firm EY-Parthenon.